Bookkeeping: 1700s vs. Today

Accounting and bookkeeping from then and now hasn’t so much differed as it has evolved. The idea is still the same: I sell you something, and you pay me for that something — with debits, credits, and all the other financial patter learned in an introductory accounting class. 18th century account books used the same method.

Here is a look at the more labor-intensive bookkeeping tactics that were used in the 1700s and how it developed into the efficient, more practical system that is used today.

Invoicing

For over 5,000 years now, people have kept records of exchanged goods and services. Even thousands of years ago, invoicing roots have been found from the Mesopotamian era, where merchants carved IOUs on clay and stone tablets using some of the earliest forms of math to account for their business transactions.

Receipts started as tablets and paintings, to plain paper, to an evolution of organized invoice paper and how its structure evolved over the centuries. Today, businesses send a half a trillion invoices per year worldwide, no longer with clay tablets, unfortunately, but through fax, email, and other accounting software that helps independent businesses specifically customize invoices that cater to each transaction. Below is a picture of what an invoice looked like for a 18th century funeral that included coffins, furniture and extras.

Receipts

The crime for not paying taxes at one point in history was punishable by death, even if one paid their taxes on time but forgot to get a receipt, death was still a permissible legal action. As humans became more civilized, receipts still remained a matter of importance, but no longer punishable by death. This came about in the late renaissance era, the start of the 18th century, along with the invention of modern banking.

The invention of modern banking made it so people didn’t have to carry their coins with them when traveling long distance. They’d deposit their coins into a bank, get a receipt, then bring that receipt to the next bank to retrieve their coins — along with a handling fee. It was simple.

The major evolution in receipting, however, occurred at the start of WWI with NCR (National Cash Register) machines. NCR became the largest printer in the United states due to a great demand of printed receipt paper. Then came thermal paper, which lowered the cost of receipt paper and provided the space for more detail on receipts, including date and time. Accountants rejoiced at the improvement as the pockets of businesspeople overflowed with receipts. Nowadays, however, the physical receipt is seeing the last of its days as e-receipts are being sent to people’s inboxes.

Financial Advising and Education

Education up until the 18th century was considered only for the upper class. Once Europe started allowing education for the poor, the literacy rate in Europe from the 17th century to the 18th century grew significantly. Students couldn’t major in any finance-specific classes then, but they had mathematics. Those who excelled in math were eligible to learn the finance trade upon employment from a bank.

Getting a degree in finance or accounting today provides endless work options. These students must work side by side with what modern finance software can do today and the free financial advice that business owners can research on their own through popular finance blogs like Fiscal Tiger. Students with a focus in finance will typically work as advisors or personal accountants for large corporations while others are affiliated in the stock trade, perhaps similarly to how bank apprenticeships might have worked back in the day.

The waste book - Information transcribed into a journal in order to begin to balance an individual’s accounts, like the modern day checkbook, or “balancing a checkbook.”

The day book (or journal) - Transactions that are entered on the day they occur for later posting to the appropriate ledger(s).

The ledger - Includes the asset accounts such as cash, accounts receivable, inventory, investments, land, and equipment.

This system, instead of working out the math and logistics manually, is luckily now available to everyone digitally, and works out basic financial algorithms independently. Anyone who lived in the era of balancing checkbooks and having to keep track of finances and expenses by hand, even after the 18th century, certainly has reason to celebrate that!

About Author:

Avery T. Phillips is a freelance human being with too much to say. She loves nature and examining human interactions with the world. Comment or tweet her @a_taylorian with any questions or suggestions.